Sensex nosedives 1,200 pts, Nifty below 23,650: HMPV scare among key factors to get D-Street spooked today

ITC | CMP: Rs 445.35 |-2.25% ITC Ltd shares price was discovered at Rs 455.6 each, down 5.6 percent or Rs 27 from the previous session's closing price, following the special pre-open session for price discovery, as the hotels arm spins off from cigarettes-to-FMCG conglomerate.

Benchmark indices Sensex and Nifty faced intense selling pressure on January 6 amid fall in PSU bank stocks and consumer stocks after lacklustre quarterly updates from key constituents. The downturn was further accentuated by weak trends across Asian markets, with major indices in Shanghai and Hong Kong moving lower.

Amid this backdrop, key stocks in the 30-share blue-chip pack, including Tata Steel and Kotak Mahindra Bank, faced substantial losses, while Titan and Bajaj Finance were the few gainers in the session.

At day's close, the Sensex was down 1,258.12 points or 1.59 percent at 77,964.99, and the Nifty was down 388.70 points or 1.62 percent at 23,616.05. About 624 shares advanced, 3,337 shares declined, and 107 shares unchanged. Investor wealth to the tune of Rs 9.5 lakh crore got eroded today, showed exchange data.

Here are the key factors contributing to the fall in markets:

1) HMPV concerns: Markets got spooked on January 6 as the Indian Council of Medical Research detected two cases of HMPVirus cases, both at Baptist hospital in Bengaluru. First one is a 3-month-old female infant while the second one is an 8-month-old male infant, who tested positive for HMPV on January 3, 2025, after being admitted to the same hospital.

It is important to note that neither of the patients have any history of international travel, the ministry underlined.

It emphasised that HMPV is already in circulation globally, including in India, and cases of respiratory illnesses associated with it have been reported in various countries.

Furthermore, based on the current data from Indian Council of Medical Research (ICMR) and Integrated Disease Surveillance Programme (IDSP) network, there has been no unusual surge in influenza-like illness (ILI) or Severe Acute Respiratory Illness (SARI) cases in the country, it added.

A market analyst said today's move is 'knee-jerk' in nature unless the virus situation evolves into something more adverse.

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"The first set of HMPV virus cases have been identified in India only very recently. The onset coincides with the ongoing flu season making it difficult to exactly ascertain the extent to which this illness could have spread. However, the Union Ministry for Health has reassured preparedness in managing any such onset of respiratory illnesses. This is a developing situation. It is expected that any negative reactions by market participants would also be limited to the extent of it being knee-jerk in nature. In absence of any further adverse development being recognised or reported, one can expect limited downside across indices, especially in terms of declines that can be exclusively attributed to this illness outbreak," said Nirav Karkera, Head of Research, Fisdom.

2) Q3 earnings jitters: The fall in markets is being attributed to the jitters ahead of the third quarter results that will kick off on January 9 with Tata Consultancy Services. Fresh foreign fund outflows also contributed to the bearish sentiment.

"A sell-on-rally sentiment prevails in the market due to a strong US dollar and high valuations," said Vinod Nair, head of research at Geojit Financial Services told Reuters

"Looking ahead, the directionality of the markets will be influenced by third-quarter earnings," Nair said.

3) Strong dollar: Emerging Asian currencies struggled for momentum against a resilient dollar on Monday, while stock markets were mixed, as investors awaited a flurry of US economic data this week to get more clarity on the Federal Reserve's rate outlook. The Chinese yuan fell to a 16-month low. It breached the key 7.3 per dollar for the first time since 2023 on Friday, as the threat of Trump tariffs looms.

The yuan has hit fresh lows routinely since Donald Trump won the US presidential election on fears of increased tariffs on Chinese products and worries about China's economic recovery.

The Indian rupee slipped to an all-time low in early trade on January 6, pressured by broad-based dollar bids.

The rupee declined to 85.82 against the US dollar, inching past its previous all-time low of 85.8075 hit in the last week of December. The currency was quoted at 85.81 as of 10:15 am.

4) Broad-based selling: All the sectors faced the brunt of the selling with metal, FMCG, PSU bank stocks falling over 2% apiece. India VIX, a volatility gauge, rose over 13% to 15.36.

With inputs from agencies